Anatole Kaletsky sometimes seems like the Stephen Hawking of economics. No problem, however deep, can faze him. No situation he finds is beyond solution. He goes – wisely, lucidly, above all confidently – where no experts have gone before. You know you're in the presence of a master. But the trouble is you can't always quite understand what he's saying.

In a way, that shouldn't be the difficulty with Capitalism 4.0 because Kaletsky keeps stopping to explain in very simple terms. Look, he says, capitalism isn't dead. Crunch and recession have merely changed it yet again. Capitalism 1.0, up to the end of the first world war, kept economics and democratic politics utterly separate. Politicians didn't meddle much, because that wasn't their role. Capitalism 2.0 – the John Maynard Keynes-cum-FDR stage – turned all that on its head. Now the politicians were bound to get involved because only the state, its elected leaders and their academic advisers, could provide the conditions for business recovery.

Capitalism 3.0, of course, headed in a completely opposite direction as Mrs Thatcher and Ronald Reagan skipped to the sidelines, leaving monetarism and market forces to do the job. God bless the markets! They were a law unto themselves. Until – whoops! – Northern Rock sank like a stone and Lehman Brothers went bump overnight. Now we need version 4.0, in which we must all be more pragmatic, more watchful, more engaged, less didactic, less blinkered, less wedded to theories that can't always work.

How do we do that, though? By following the creed of the Great Kaletsky, obviously enough. Except that along this path there is no set of laws, no neat package of theories, that can do the job for us. Success in key stage 4.0 demands brains constantly engaged, logic relentlessly applied. And if something, by mischance, should go wrong (as, of course, it will)? Well, just pick yourself up, dust yourself down and move straight onto stage 5.0.

This is a harsh precis, to be sure. It isn't fair to a book stuffed with hops, skips and intellectual jumps that leave most current economic wisdom stretched flat on the carpet. Were we all ridiculously in hock when the crunch came? No: America in particular made a melodrama out of very modest crisis. It isn't even as though its level of mortgage debt was anything special. Should the bankers be tarred and feathered? No, again: they made mistakes – but the most grotesque error, the imbecility that brought redundant panic, belonged to Henry Paulson, the treasury secretary who let Lehman's fail and then spent the next few month paying trillions to stop Wall Street and the City quivering.

Capitalism 4.0, you'll be glad to know, has no room for big Hank or followers of George W Bush – the Incompetent party. Nor is there much here to comfort chancellor Osborne either. Pay off the debt by 2015 so that the curse of constant penury is lifted from our children's children? That's mechanistic rubbish (according to the "editor at large" of the Times). Most things in life are a balance of policies, not one black-and-white way or another. "Whether borrowing is sensible or harmful for a family or a business or a nation is not a matter of principle, but a matter of degree". A little bit of Friedman and a little bit of Keynes can help the same medicine go down.

And, as the fourth dimension develops, you begin to savour the unique flavour of both this book and Kaletsky's approach to his art. He writes beautifully, often in the thousand-word bursts of a natural columnist. He also has the gift of embodying his kaleidoscope of theses without need for lugubrious lecturing. What is economics, after all? We're often invited to see it as a social science, with particular stress on the science part. Nobel prizes are duly awarded to the gloomiest of them all, because – as JK Galbraith once observed – "Pessimism is the mark of superior intellect". Universities start schools of this or that, the Minford school, the Blanchflower school. Revered operators like Alan Budd are hired for three months or so to tell us, with thundering clarity, how we're doing.

But life isn't like that; and nor are the frail strands of economic theory we clutch at from crisis to crisis. Economics is political behaviour, human behaviour and common sense, rolled in with all the rules, diktats and chunks of mathematics. Economics opens new doors and lays down few laws. Economics is a learning experience from boom to bust and back again.

Well, we're learning again, right now. And, post-Budd, we obviously need something more than an Office of Budget Depressing Responsibility. How about hiring Anatole Kaletsky to start the Office of Unexpected Outcomes? We're quite as likely to do as well that way: and, golly, it could be fun.